Situation in Abkhazia deteriorated with reports of at least 2 Georgians killed in separate incidents. UN observers expressed concern and urged sides to convene high-level meeting. Dispute topped agenda of 19 November meeting between UNSG Annan and President Saakashvili. OSCE talks held 15-16 November on South Ossetia conflict. Georgian PM argued for broadening of Joint Control Commission to include U.S. and EU, saying current format futile.

Parliament passed resolution setting deadlines for improved performance of Russian peacekeepers in South Ossetia (10 February), and Abkhazia (1 July), threatening their withdrawal thereafter. Russia pulled out of bilateral meeting scheduled 17-18 October. Joint Control Commission for South Ossetia met 24 October in Moscow; Russia and South Ossetia rejected Georgia’s call for inclusion of U.S. and EU. Georgia unveiled new peace plan at 27 October OSCE meeting; U.S. welcomed plan. FM Zourabishvili dismissed 19 October after parliament demanded resignation; thousands of her supporters assembled in Tbilisi: Former National Security Council Secretary Gela Bezhuashvili appointed to post.

President Saakashvili accused Russia of engaging in effective annexation of breakaway regions of South Ossetia and Abkhazia, and called for greater UN involvement. Some Georgian MPs accused Russian peacekeepers of criminal activity. Russian and Georgian representatives held “constructive” talks on peacekeeping operation in Moscow, 28 September. South Ossetian officials said 10 wounded by shells fired at Tskhinvali 20 September during 15th anniversary celebrations of de facto independence also attended by Abkhaz leader Sergey Bagapsh. Tbilisi rejected accusations of involvement and said South Ossetia in breach of demilitarisation agreements; South Ossetia suspended involvement in Joint Control Commission. Sporadic gunfire on Georgian villages reported 21 September. Government signed $300m Millennium Challenge Account aid deal with U.S.

Tensions in South Ossetia conflict zone remained high as reciprocal kidnappings and random shootings continued; main roads closed. UN-mediated talks in Tbilisi with Abkhazia deemed “constructive” by all parties, but no significant progress. De facto Abkhaz President Sergey Bagapsh reiterated aspiration for associate membership of Russian Federation; stated all Abkhaz will hold Russian citizenship within year. Abkhazia held major military exercises 15 August. Russia began withdrawing military hardware from remaining Batumi and Akhalkalaki bases.

Authorities claimed to have solved 2 recent “terrorist” events. Interior ministry arrested 3 South Ossetians in connection with February bombing of Gori police station; accused Russian intelligence of training men. 1 policeman killed in arrest of man accused of assassination attempt on U.S. President Bush in May. South Ossetian and Russian representatives failed to attend Batumi peace conference 10- 11 July; South Ossetians claimed event was Georgian public relations exercise. President Saakashvili presented “Strategic plan for resolution of civil confrontation in former South Ossetia” - document criticised for insufficient benchmarking. Russia began troop withdrawals 30 July in accordance with May agreement for full withdrawal by 2008.

Government announced plans for major international conference in Batumi 10 July to advance president’s peace plan for South Ossetia, whose authorities said will not participate, calling it PR event. Situation in conflict zone remained tense as search for 4 kidnapped Georgians continued. To ease tensions, Joint Control Commission (JCC) met Moscow 22 June and agreed to jointly investigate recent incidents in zone.

Signature of major agreement 30 May leading to full withdrawal of Russian forces from Georgia by end of 2008; heavy armour pullout to begin 2005. Russia sought guarantees on non-deployment of third-country troops following withdrawal; joint anti-terrorist centre planned for Batumi. U.S. President Bush visited Tbilisi 9-10 May, while President Saakashvili boycotted Moscow celebrations of end of World War II. Sec. State Condoleezza Rice said U.S.-trained troops would not be used to help end secessionist disputes. In South Ossetia, 2 OSCE monitors were detained by Tskhinvali authorities; 1 Georgian and 4 Ossetians killed in gunfight in South Ossetian conflict zone.

Georgian and Russian foreign ministers agreed – subject to finalisation by treaty – Russian military base dismantlement by January 2008. Tbilisi continued to seek international monitors Russian border. EU assessment mission deployed early April; OSCE approved new border guard training program to run through end 2005. Two days of UN- brokered talks between Georgian and Abkhaz officials concluded 8 April in Geneva. Chaired by UN Undersecretary- General for Peacekeeping Operations Jean-Marie Guehenno, talks were first bringing sides together since Rose Revolution. De facto Abkhaz PM Aleksandr Ankvab survived second assassination attempt in 2 months; may be linked to his threatened crackdown on mafia. Georgia announced closure of reservist training camp in South Ossetia conflict zone.

Relations with Russia remained tense, as parliament unanimously approved resolution calling for dismantlement of Russian military bases by 2006. South Ossetian situation also remained on edge, with no progress on demilitarisation of conflict zone, and intensified Georgian anti-smuggling efforts. Amid continued strengthening of Georgian military, President Saakashvili declared would not wait forever for South Ossetia to respond to his January peace initiative. Meanwhile, newly appointed PM of breakaway Abkhazia shot at, but uninjured, 28 February; uncertain whether incident connected to wider power struggles between newly elected President Bagapsh and VP Khajimba.

PM Zurab Zhvania found dead in acquaintance’s Tbilisi apartment 3 February. Official investigation blamed carbon-monoxide poisoning from faulty gas heater; some observers questioned cause of death. Loss of one of country’s most experienced politicians likely to weaken Saakashvili administration. Saakashvili nominated Zhvania's close associate, former Minister of Finance Zurab Nogaideli, as PM. Car bomb exploded outside police headquarters in Gori 1 February, killing 3 policemen and injuring 23. Authorities launched investigation, cautioned against blaming South Ossetians. Tbilisi-Moscow relations continued slide, with no progress in bilateral talks on framework agreement. EU mission traveled to Georgia in response to government's request to start border-monitoring mission to replace OSCE monitors. Sergei Bagapsh inaugurated president of de facto republic of Abkhazia 12 February.